Stocks go into free fall
Investors demand resignation of finance minister, BSEC chairman
Stocks continued to tumble amid jitters over banks' liquidity crisis. After starting the day at 5,710, DSEX, the benchmark index of the Dhaka Stock Exchange, plunged to below 5,700 points in less than half an hour. Eventually, it lost 81.92 points to close the day at 5,623.64.
With yesterday's plunge, the DSE lost 204 points in the last three days.
“The Bangladesh Bank has relaxed the rules to help banks address its liquidity crisis, but there is no reflection of it in the market,” said a senior official of the DSE.
Reports of liquidity crisis have sent investors into a panic mode, persuading them to sell off their stocks, according to brokers.
The capital market witnessed another bearish session, the third in a row, amid day-long selling pressure, said EBL Securities in its daily market analysis.
Investors' selling pressure was most felt by banks, non-bank financial institutions and telecom stocks, it said.
NBFI declined 2.14 percent, followed by banks at 1.87 percent, engineering 1.41 percent, textiles 1.36 percent, and telecom 1 percent.
A senior official of the DSE pinned the slide on the downturn in fortunes of banks and NBFI stocks, which account for a large part of the market capitalisation.
Some institutional investors are suffering from liquidity crisis, said Mostaque Ahmed Sadeque, president of the Dhaka Stock Exchange Brokers Association (DBA).
The state banks' loan-deposit ratio is very low, so they can invest more in the capital market, said Mohammed Nasir Uddin Chowdhury, president of the Bangladesh Merchant Bankers Association (BMBA).
He went on to recommend the BB decrease the cash reserve ratio for easing off the liquidity crisis.
The DBA and the BMBA yesterday held a meeting to take stock of the situation with the capital market.
In another development, the Bangladesh Pujibazar Biniogkari Oikko Parishad, a platform of investors, organised a human chain in front of the DSE.
The small investors were crying as the slide in stocks has wiped off huge amounts.
They also demanded the resignation of the finance minister and the chairman of the Bangladesh Securities and Exchange Commission for their failure to keep the capital market calm. Turnover, one of the important indicators of the market, declined 5.3 percent to Tk 282.32 crore, with 8.68 crore shares and mutual fund units changing hands.
Of the traded issues, 18 advanced, 291 declined, and 27 remained unchanged on the premier bourse.
Queen South Textile Mills, which made its stock market debut yesterday, dominated the turnover chart with its transaction of 64.32 lakh shares worth Tk 18.58 crore.
It was followed by Monno Ceramics, Grameenphone, Square Pharmaceuticals and IFAD Autos.
CAPM IBBL Islamic Mutual Fund was the day's best performer with its 3.92 percent gains, followed by Padma Oil at 2.48 percent and Shasha Denims at 2.16 percent.
Reliance Insurance was the worst loser, shedding 11.36 percent, followed by Meghna Condensed Milk at 10 percent and Sonargaon Textiles at 9.81 percent.
The port city bourse's benchmark index, CSCX, also fell 156.46 points yesterday to finish the day at 10,497.90.
Losers beat gainers as 196 stocks declined and 18 advanced; 16 stocks remained unchanged on the CSE.
A total of 64.42 lakh shares and mutual fund units worth Tk 26.36 crore changed hands at the port city bourse.